Goldman Sachs wants to create its own version of bitcoin

[think]

Goldman Sachs wants to create its own version of bitcoin

Ian Kar - December 02, 2015

Goldman Sachs has developed its own cryptocurrency for a settlement system for trading stocks, bonds and other assets, according to a recently published patent filing.

The New York-based financial giant made a patent application last year for a new virtual currency called SETLCoin, which makes it easier and faster to trade securities and settle those trades. (The patent application was published only recently, a typical lag between patent applications and when they are made public by the US Patent and Trademark Office.)

While the trading desks at the world’s top financial institutions often rely on lightning fast technology to execute trades, it can still take days before the promised cash and securities—such as stocks and bonds—actually change hands, a process known as settlement.

That gap between the time the trades are executed and the settlement of the trade is a risk for traders. (It’s always possible that the person you were trading with goes bankrupt before they deliver the cash or securities you are expecting.) Goldman Sachs says in the patent application that SETLCoin guarantees “nearly instantaneous execution and settlement” for trades.

While SETLCoin is a virtual currency, it isn’t bitcoin, which adds to the growing evidence that financial institutions are less interested bitcoin itself and more interested in the technology behind bitcoin, known as blockchain...

Full article:
http://qz.com/563967/goldman-sachs-wants-to-create-its-own-version-of-bitcoin/

[LuvNewcastle]

1. Isn't this like coining their own money?

Dangerous doesn't even begin to describe it.

[DetlefK]

4. Banks are already legally coining money.

There is many times more money in electronic accounts than there is in coins and bills.

For example: You and 9 other people each deposit $1000 in your bank-account. You hand in your bills and you get a certificate that can be exchanged for $1000 in goods, values and bills.

The bank now has $10,000 in bills and owes every one of you $1000. But there will most likely never be a situation where the bank will actually need $10,000 in bills.
* The bank can use this cash-money for investments.
* When money is transfered from one bank-account to another, the bank does not take cash-money out of the register and put it back into the register. It merely changes some numbers in some file.
* The bank can give you a $20,000 loan even if they only have $10,000 in cash in their bank. They can do this... as long as you only need a certificate that says that you own (and owe the bank) $20,000, and not $20,000 in actual bills.

It's basically like the stock-market on a smaller and more transparent scale.




There is many times more monetary value stored in the international derivatives-market than the gross domestic product of planet Earth. If people start withdrawing their money from this market on a large scale... if people demand that their electronic money be converted into physical value... there wouldn't be enough cash-money on planet Earth for all these withdrawals.

It's a house of cards. The overwhelming fraction of all money in the world is in no way backed up by currency-issuing institutions. The money exists only in a virtual state. It exists only on paper. And the system works... as long as nobody actually demands to move that money out of the bank.

For example:
The economic crisis in Greece. People thought that the banks would collapse and started converting electronic money to physical money on a large scale. This was a problem, because now the banks no longer had enough cash in their registers to meet their customer's needs.

[LuvNewcastle]

5. Thanks for the explanation.

[PeoViejo]

2. good

Call it the sachs auf scheisse.

[Javaman]

3. it will only be worth something to them, to everyone else it will be worthless. nt

[LittleBlue]

6. A currency that frees them from all government control. Gotta hand it to Sachs

I was wondering when this would happen. They are clever enough to see the need for it.

[think]

7. GS is always looking for a new way to game the system....